Australia Post pushes for 'urgent reform'

By Alana Schetzer

Australians are set to be forced to pay more for 'regular' mail delivery as Australia Post pushes forward with its proposed shake-up of its dwindling letters service.

Managing director Ahmed Fahour outlined the proposed changes on the back of the business announcing today its mail division lost a record $328.4 million in 2013-14.

Australia Post managing director Ahmed Fahour said the changes meant the business represents a shift from "a letters business to a parcel business".Credit:Luis Enrique Ascui

He said without the "urgent reform", Australia Post would have to ask the federal government for taxpayer support. There will be three options - regular, priority and express - that customers will be able to choose from.

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Priority delivery will occur five days a week, for a fee, while regular delivery will occur one to two days after priority. Customers can choose their preference by the type and cost of a stamp.

The cost of a stamp - 70 cents - is amongst the cheapest in the world but does not cover the cost of the service, he said.

He said the reforms would deliver choice and flexibility for customers, 97 per cent of whom were businesses and governments.

Australia Post's parcel delivery service continues to grow thanks to the explosion in online shopping, helping to post an overall profit of $116 million. It is a 35 per cent drop in profit compared to the previous 12 months.

"More people are shifting from delivered mail to online. We need to respond," Mr Fahour said.

Mr Fahour said the financial bleeding from the letter delivery service was "overwhelming" other parts of the business.

In other announcements, from this Christmas, the majority of Australia Post offices will be open on Saturdays and parcels and express post and express letters will be delivered on Saturdays.

Mr Fahour said the changes represented what "Australians want". He said the changes meant the business represents a shift from "a letters business to a parcel business". As more customers move from receiving traditional mail to online, Mr Fahour said the letter delivery service was essential if the company was to remain sustainable.